I just bought one of those generic "betta mini tanks." It is 2.5 gallons and comes with a divider so I can put two bettas in it. Anyway, I have it all set up, I have a little 50W heater andddd the only thing I am concerned about is the filter. I know I will have to do water changes anyway, but this thing came with an under gravel filter. I just do not get how the thing works - is this going to be enough for them?

The undergravel filter has 2 kinds of filter media. It has gravel that filters out a lot of the solid stuff and it has gravel that provides a place for the nitrogen converting bacteria to grow. The gravel is in contact with lots of oxygen rich water because of the circulation of water down through the gravel so the bacteria do pretty well. The only thing that it is missing is the chemical filter that other filters use carbon for.

To clarify what ghreed was saying- there are three kinds of filtration; mechanical, biological and chemical.

Mechanical is the part that filter out the visible dirt. Any gunk floating in the water will get caught up in the gravel and not continue to recirculate in the tank. Biological is arguabley the most important. There is bacteria that builds up in every fish tank that feeds on the waste of the fish. They break down this fish waste so that it is not dangerous for the fish. Chemical filtration is done through things like activated carbon. It also breaks down fish waste, only once the chemical runs out, it is no longer effective. I don't use carbon in my filters because I feel it is unnecessary. It has to be replaced every 2-4 weeks and I already have the other 2 kinds of filtration, which is plenty.

As for how many bettas to keep in the tank, 1 is really the max. The standard rule for fish keeping is 1 inch per gallon. As bettas grow to be 2.5 inches long, and the tank is 2.5 gallons, this tank is just large enough for one fish.

Air is lifted up the lift tubes causing a flow of water. The displaced water comes from under the filter plate. That water comes from the tank, being drawn down through the gravel and bio-bed removing particles and ammonia. It's just a big circle. That is why, when doing water changes, it is best to sweep the gravel from time to time. That keeps the substrate clear and prevents it from compacting.